Today’s

Vocabulary

(1) Compensation: Usually money, but anything someone is given to do a job.

If we want to attract the best employees, we need to increase compensation.

(2) Big bucks: Bucks means dollars, so we often talk about “big bucks” to mean a lot of money.

I don’t get paid big bucks, but I love my job.

(3) Objectively: The opposite of subjectively–it means to think about something without emotions or personal opinions

I can’t think about this deal objectively because I’m so angry with her.

Today’s

Questions

1. Why should executive compensation be put at risk?

a. It’s only fair for executives to be able to lose their money.

b. So that executives can lose something and are therefore motivated to work well.

c. If executives can lose their money, they’ll think about the long-term more.

2. What’s one way compensation could encourage long-term thinking?

a. It could be lost if the executive does a bad job

b. It could be linked with low pay at the company

c. It could increase for each good year

3. What’s one way to make executive pay fair?

a. It could be linked with low pay at the company

b. Executives could get paid well only if the company does well

c. It could be linked with long-term thinking

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Free Form Friday

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By Jeremy Schaar

Today on the blog, we’ll look at an article on CEO pay. You’ll learn some interesting ideas about how to determine CEO pay. You’ll also learn some useful vocabulary.

In this post at Strategy+Business, James O’Toole discusses CEO pay. He begins by noting that SEC (Securities and Exchange Commission) regulators are going to force companies to become more transparent about CEO pay. But he would prefer if company boards would just do a better job with executive compensation. To that end he suggests three principles.

1. “Put executive money at risk”

To be “at risk” means that something can be lost. He gives a nice example of going to a casino. If you’re playing with your money, then you’re cautious. But if the casino gives you money, then you don’t care. You can only win, you can’t lose. With stock options, he feels executives have nothing to lose, they can only win. He encourages companies to give actual stock instead of stock options.

2. “Compensation needs to encourage long-term thinking.”

To encourage something is to push someone to something. He thinks that bonuses are good motivators, but that they should increase with each year of performance in order to encourage long-term thinking (e.g. 10% for one good year, 20% for two good years, etc.)

3. “The third principle is fairness. I suspect there would be less public outcry about executive compensation if those big bucks were seen as objectively earned.”

“Public outcry” is when a lot of people complain about something. He doesn’t know what fair pay is, but it does seem unfair for a CEO to make $25 million when a secretary makes $25,000. But that’s not his real point. He thinks the big problem is when executives get a lot of money after the company does really bad. Fair means that if the company does well, so does the executive. If the company does bad, the executives don’t get millions of dollars.

What do you think? As always, if you have any questions, please post them on the blog, Facebook, or Twitter.

And, by the way, if you have trouble understanding the blogs or LinkedIn groups, send me a message. We teach lots of students Business English and I’m sure we could help you too!

B, C, B

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Today’s

Vocabulary

Be very assertive when you ask for a raise. Tell her exactly why she should give it to you. Don’t be afraid.

(2) Rude: Impolite

I can’t believe how rude he is! He asked how old I was and if I was on a diet!

(3) Grateful: Thankful

I was really grateful you were there. I would have done terrible without you.

Today’s

Questions

1. What is a big advantage of being direct?

a. You know no one will be angry

b. You know you will be understood

c. You know they’ll like you

2. What is a big advantage of being polite?

a. You know no one will be angry

b. You know you will be understood

c. You know they’ll like you

3. What is one way to be polite?

a. Tell a joke

b. Say that something is possible

c. Ask if something is possible

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Writing Great Emails

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By Jeremy Schaar

Do you want to be more polite or more direct when you’re writing emails? There are advantages and disadvantages to both. Of course, it’s not quite so simple. In a perfect world, your writing will be both polite and direct.

In today’s lesson, you’ll learn about the differences. Then you’ll study some examples.

Direct

Advantages: Direct writing is confident and assertive. You’re acting like you know what you’re writing about very well. It’s also very clear.

Disadvantages: Direct writing can be rude and uncaring if you’re not careful.

Polite

Advantages: You’ll be friendly, likeable, and caring.

Disadvantages: By focusing on being polite, it might not seem like something is very important to you.

Let’s look at a situation. The first sentence will be direct. The second will be polite. The third will be a combination.

Situation: You need to request 500 extra units of something at the last minute. You’re writing to your supplier.

Direct:Please send 500 extra units. We will need them by Friday.

Polite: Do you think it would be possible to send us 500 extra units by Friday? We’d be most grateful.

Notice that the direct version is very short and clear. No one would misunderstand you. However, you’re giving an order here. Do you want to order your supplier? What if they can’t do it? What if they’ll feel bad if you don’t ask nicely? Maybe you’ll offend them.

The polite version could be misunderstood. It doesn’t seem important. However, by saying “do you think it would be possible,” you’re being very kind. “We’d be most grateful” means that you’re thanking them in advance. They haven’t even done anything, and you’ve already thanked them!

Best:We really need 500 extra units by Friday. Can you help us out with this order?

This is best. You’re being direct, but polite. You still ask a question, but only after you’ve been direct. (Questions make English more polite.) Also, you don’t thank them in advance. Instead, you ask a short question and imply that you’ll thank them for the help.

(3) To be in conflict with: When two things cause problems by existing together

The supplier’s order specifications are in conflict with our best practices. We need to adjust one or the other.

Today’s

Questions

1. Which is least likely to be a KPI?

a. Sales Volume

b. Sales Leads

c. Sales Hires

2. What is a harmonized key performance indicator?

a. An indicator that works for all (or most) areas of a company

b. An indicator that increases profits

c. An indicator that is the same for the customer and for the company

3. How might a boss request more information?

a. I want everyone to mix up…

b. I want everyone to draw up…

c. I want everyone to move up…

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SUPPLY CHAIN WEDNESDAY

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By Jeremy Schaar

Today on the blog you’ll learn about Harmonized Key Performance Indicators (KPI). You’ll learn about an example of how a company can create good indicators. Finally, you’ll learn some real life expressions that you can use on the job.

Concept

Key Performance Indicators (KPI) are metrics a company uses to check how well they are performing. Examples of metrics include volume and how well you stay on schedule. Many different metrics can help track and motivate a department. For example, if the metric is volume, the production team will certainly do their best to produce the correct volume. If the metric is defects, then teams will try to reduce the number of defects.

The difficult situation is when metrics are in conflict. Manufacturing might need to choose between volume and defects. That’s hard, but management can direct manufacturing to focus on one thing. The bigger problem is when the metric for one department is in conflict with the metric for another department. For example, sales might be trying to increase orders. At the same time, manufacturing might be trying to decrease defects. A company with this situation could easily have too many orders

Example

Here’s a great link to a paper by Booz and Company. Scroll down to page seven and you’ll see a great example of a harmonized key performance indicator. Harmonized key performance indicators work well for all (or most) areas of a company. In the paper, they write about the cash conversion cycle. They write that this is “a single metric to focus everyone on the speed of moving things along the supply chain—a common theme that would impact the functional metrics of inventory, service levels, lead times, and quality.”

This should be the goal of key performance indicators. They should be metrics that work across departments. Ideally, they’ll be of use for your partners and clients as well.

On The Job

“ I want everyone to draw up a list of performance indicators that other departments could use.”

This sentence is a way to request people to think about harmonized key performance indicators. It’s something a boss would say to get more information.

“The problem is that our suppliers, our customers, and we all define the metrics differently. There’s no harmony among us.”

“The problem is that” is an easy way to start a sentence about a complaint. It clearly announces it. In this case the problem is about the harmony of metrics.

Got questions or comments? How about practicing some new vocabulary and posting your thoughts on the blog, Facebook, or Twitter?

Today’s

Vocabulary

If this product isn’t a phenomenal success, we’re going to go bankrupt.

(3) A hit: Something that was quite popular

Each iPhone seems like it’s a bigger hit than the last one.

Today’s

Questions

1. Which company makes Reece’s Pieces?

a. Hershey’s

b. Mars

c. Hermes

2. Why do companies use product placement?

a. To promote their products

b. To show their products with the target customers

c. A & B

3. By how much did sales of Reece’s Pieces increase?

a. More than 50%

b. More than 75%

c. More than 100%

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GLOBAL MARKETING TUESDAY

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By Jeremy Schaar

Placement is used by luxury brands to put their brand in a luxurious setting. For example, Hermes scarves became very popular after appearing in the movie Basic Instinct.

But many other companies also use placement. For example, cigarette companies wanted Hollywood to show stars smoking in movies.

Perhaps the most famous example of product placement is in the movie E.T. The Extra-Terrestrial. In the 1982 movie by Steven Spielberg, a little boy uses a small candy to lure an alien away from his hiding place. Originally, they were going to use M&Ms, but Mars, Inc. (the company that produces M&Ms) decided they didn’t want to be in the film. So, they used Reece’s Pieces instead.

Hershey’s–the company that makes Reece’s Pieces–agreed to let them use the candy for free. In exchange, Hershey’s had to spend $1 million to promote the movie and they were allowed to use E.T. in their advertisements.

The movie was a phenomenal success. As a result Reece’s Pieces were also a new hit. Sales went up more than 50%. Even today, people remember the movie and enjoy the candy.

Note that this placement is not just successful because the movie was successful. (Though that is definitely true.) The exact placement was also important. A little boy was eating and using the candy. That’s important because children are such important customers for candy.

Partly as a result of the placement of the candy in the movie, these days product placement in movies is common. Usually it’s not a big deal, but everyone is hoping that their product will be the next Reece’s Pieces.

Got questions or comments? How about practicing some new vocabulary and posting your thoughts on the blog, Facebook, or Twitter?

To quickly review, Microsoft’s previous strategy was to only sell software. Everyone wanted the same software, so they could charge high prices and everyone would pay. They didn’t make hardware because all the hardware was basically the same. It was a commodity and not very profitable.

Things changed for two reasons. First, hardware isn’t a commodity anymore. For example, there are significant differences between an iPhone and a Galaxy Note. Second, Google now gives away Android for free.

Therefore, Microsoft is now trying to copy Apple and make the best software/hardware bundle. They hope people will buy their devices because their hardware and software are so good.

Will this work?

It will be hard. Apple and Samsung are already great. But here’s a case for how Microsoft succeeds.

First, note that most people use their tablets for entertainment–not for work. Apple and Samsung understand this, so their tablets are designed for games and web browsing more than productivity. They don’t really try to sell tablets to corporations. The Microsoft tablet is different. Microsoft emphasizes that you can multitask with it, you can use Microsoft Office, and it has a nice stand and keyboard.

Imagine that the Microsoft tablet therefore becomes the default device for businesses. In fact, Microsoft is still very profitable because of its corporate accounts. (Many people download illegal versions of Microsoft Windows, but corporations still pay.) Microsoft can leverage those existing relationships to sell their tablets. Then, when office workers are all using their tablets, they’ll be able to expand to the general public.

With the strategy decided, it becomes a question of B2B marketing. It will be fascinating to watch how well Microsoft succeeds.

Got questions or comments? How about practicing some new vocabulary and posting your thoughts on the blog, Facebook, or Twitter?

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About Jeremy

I'm passionate about education and communication. For me, Stuart Mill English is about helping students learn and teachers teach. And all the great things that come when students succeed and teachers thrive. Thanks for stopping by.